Universal Studios and 20th Century Fox, the two movie studios who previously agreed to finance the new Halo movie, have abruptly backed out of the project.

Rumors have said that the project was beginning to go over budget and nudge toward $200 million. Ken Kamins, a representative for producers Peter Jackson and Fran Walsh, claims that Universal and Fox negotiators put pressure on the film team to reduce their prices at the last minute. Jackson and Walsh rejected the idea of reducing their deals and claimed that the budget was on track. Ken explained, "The only budget the filmmakers ever spoke about was $145 million less the 12.5% rebate that you get from shooting in New Zealand, which would put it at about $128 million. That was the only number that was ever discussed."

Kamins has also clarified the negotiations, "What happened was this: Universal, on behalf of both studios, asked for a meeting with the filmmakers just prior to the due date of a significant payment. Basically, they said that in order to move forward with the film, the filmmakers had to significantly reduce their deals. They waited until the last minute to have this conversation. Peter and Fran, after speaking with their producing partners and with Microsoft and Bungie, respectfully declined."

Kamins says that these studio exits will not halt movie production, which is currently underway at Weta Digital and Weta Workshop in New Zealand.

Others are claiming that Universal and Fox retreated due to a lack of confidence in first-time feature film director Neill Blomkamp. Kamins pays little attention to these claims. "Everybody is supremely confident in Neill. Part of what excited Peter and Fran was Neill's vision. We're very confident this film will move forward with the creative partners intact, who will take the film to production."

More on this story will be reported as the news trickles out from the studios.